Tag: Banks

Hotel lending: Banks in ‘race against time’

A surge in coronavirus cases on the cusp of winter has hotel operators and their lenders on high alert.

Banks that lend to hotels — as well as motels, resorts and other lodging establishments — had hoped that six months of loan forbearance would be enough to usher the hospitality sector from crisis to recovery and ward off defaults and lofty charge-offs.

But most initial deferral periods ended in October, and others will expire in a matter of weeks, leaving hotels to resume payments just as the pandemic enters a new phase.

STR, a hotel industry data firm, said average U.S. national occupancy was 43% for the week ended Nov. 13, down more than 32% from a year earlier and, notably, off from 48% during the third quarter, when travel and hotel bookings had started to rebound.

“I don’t think we, as an industry, are out of the woods,” Kessel Stelling, chairman and CEO of Synovus Financial in Columbus, Ga., said at recent conference hosted by Bank of America. “I think we’ve got a tough couple of months” ahead.

Hotel occupancy by-the-numbers

The $53 billion-asset Synovus was an active hotel lender before the pandemic. Hotel loans accounted for 70% of the $865 million increase in criticized and classified loans during the third quarter, executives said during the company’s third-quarter earnings call.

Nearly 9% of Synovus’ hotel portfolio, or $125 million in loans, had principal and interest deferrals on Sept. 30. Those credits accounted for three-fourths of commercial loans on deferral, demonstrating the outsize pain that hotels had endured.

The latest health data bodes poorly for the hospitality sector. The pandemic has intensified, topping 100,000 daily cases since Nov. 3 and putting the month on track to be the worst yet, according to Johns Hopkins University’s running tally. The U.S. reported more than 170,000 cases on multiple days in November, a level that had not been reached in prior months.

States such as New York, Illinois and California have imposed new restrictions to slow the spread of the virus, and the Centers for Disease Control and Prevention has advised against Thanksgiving travel. And hotel bookings are falling again.

Amid all that, bankers will have to start making hard decisions on loans coming out of deferment. Regulators let banks offer deferrals and modifications without labeling them as troubled debt restructurings, which would normally signal charge-offs ahead. Most of the deferrals started in April and May.

Barring new government intervention — either from regulators or Congress — hoteliers face the possiblity of default. And banks may have to start charging off substantial amounts of loans during the fourth quarter, said Matthew Anderson, a managing director at Trepp.

Trepp, a commercial real estate data firm, said the total delinquency rate on commercial mortgage-backed securities made post-2009 — where payments are more than a month past due — was 7.43% in October. CMBS delinquencies are much higher for lodging loans: 19.2%.

Delinquency rates on hotel loans held on bank balance sheets have hovered near zero, Anderson said, but

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UK shares jump on vaccine optimism; banks, travel stocks shine

(Reuters) – British stocks jumped on Monday as positive vaccine data from drugmaker Moderna bolstered hopes of a swift economic recovery to pre-pandemic levels, offsetting concerns over a post-Brexit trade deal with the European Union.

FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville

The blue-chip FTSE 100 index .FTSE closed 1.7% higher, after Moderna Inc MRNA.O reported its experimental vaccine is 94.5% effective in preventing COVID-19 based on interim data from a late-stage trial.

Pfizer Inc PFE.N and German drugmker BioNTech SE BNTX.O made a similar announcement on Nov. 9. British drugmaker AstraZeneca Plc AZN.L, which is yet to release results from its late-stage vaccine trials, fell 1%.

The domestically focussed mid-cap FTSE 250 index .FTMC ended 1.8% higher, with cinema operator Cineworld Group Plc CINE.L jumping 13.5% to the top of the index. The wider travel and leisure sub-index .FTNMX5750 gained 3.2%.

“This (vaccine news) is more evidence that an end to the pandemic is on the horizon and that the economy can eventually reopen without fears of further lockdowns,” said David Trainer, CEO of New Constructs, an investment research firm based in Nashville, Tennessee.

Energy .FTNMX0530, bank .FTNMX8350 and mining .FTNMX1770 stocks provided the biggest boost to the FTSE 100, which has already gained more than 15% this month, helped by a slew of local stimulus measures and hopes of a sooner-than-expected economic recovery.

Bank stocks also gained following news that PNC Financial Services Group Inc PNC.N would buy the U.S. business of Spanish lender BBVA BBVA.MC for $11.6 billion in cash.

Vodafone Group Plc VOD.L surged 6.9%, after saying it was increasingly confident about its full-year performance, while tech firm Smiths Group SMIN.L rose 4.8%, after highlighting a 30 million-pound cost-saving target for FY21.

Companies that have benefited from people staying home during the pandemic, such as Rentokil Initial RTO.L, Just Eat Takeaway.com JETJ.L and Ocado Group Plc OCDO.L, tumbled between 3.3% and 4.1%.

Meanwhile on the Brexit front, EU warned Britain on Monday that time was fast running out for a trade deal, as negotiators in Brussels began a last-ditch attempt to avoid a tumultuous exit at the end of December.

Reporting by Devik Jain in Bengaluru; Editing by Uttaresh.V and Matthew Lewis

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Vacation, Paid Leave Banks, and Vacation Cash Payouts

This policy was a part of the former UPS Policy set that was integrated into the System Administrative Policy set. It applies to all University of Wisconsin institutions except for UW-Madison. For UW-Madison’s policies, please see the Human Resource Design Policies website.

Original Issuance Date: July 1, 2015
Last Revised Date:

1. Policy Purpose

The purpose of this policy is to establish guidelines for the administration of paid vacation for UW System employees. The policy covers eligibility, accrual, use, reporting, carryover, paid leave banks, annual vacation cash payouts and treatment of vacation balances upon movement or termination of employment.

2. Policy Background

Vacation options for eligible faculty, academic staff, and limited appointees were created by Regent Resolution 6698 (adopted 06/19/2994), amended by Resolution 7802 (adopted 11/08/1998) amended by Resolution 8745 (adopted 10/10/2003); and University Personnel Guidelines #9: Unclassified Staff Paid Vacation, Holiday, and Catastrophic Leave implemented the Regent resolutions.

Before the July 1, 2015 effective date of the University Personnel System, vacation for classified employees (now university staff) was provided for in Wis. Stat. § 230.35 and Wis. Admin. Code § ER 18.02. This policy now covers vacation, paid leave banks, and vacation cash payouts for all UW System employees.

3. Policy Definitions

Please see SYS 1225, General Terms and Definitions, for a list of general terms and definitions.

4. Policy

UW System employees who meet the eligibility requirements set forth in this policy are eligible for paid time off work for vacations and other personal purposes.

A. Eligibility for Paid Vacation

(1) University Staff

All university staff, except those in a temporary appointment, are eligible for paid vacation. Crafts workers are provided vacation in accordance with provisions in this policy, except as indicated in SYS 1238, Craft Workers.

(2) Faculty, Academic Staff, and Limited Appointees (annual basis appointments only)

All faculty, academic staff, and limited appointees are eligible for vacation if they are:

  • In an annual-basis appointment; and
  • Covered by the Wisconsin Retirement System (WRS), or
  • If not covered by the WRS, expected to work at least 440 hours (21% for annual-basis appointment) for at least one year.

If not initially eligible to earn vacation, the employee can later become eligible through a change in expectations or meeting the above criteria during the immediately preceding 12-month period

(3) Rehired Annuitants

A rehired annuitant for the purposes of this policy is a UW System employee who is currently receiving a retirement or disability annuity from the WRS. See SYS 1229, Rehired Annuitants, for additional information.

  • A rehired WRS annuitant is eligible to earn vacation if the eligibility requirements provided for in this policy are met.
    • NOTE: Only time worked for a UW System institution after the employee’s WRS annuity effective date is included to meet the one-year duration requirement in Section 4.A.(2) of this policy.
  • If not initially eligible to earn vacation, a rehired annuitant can later become eligible through a change in expectations or meeting the above criteria during the immediately preceding 12-month period.
  • Vacation hours earned
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